Business Law Multiple Choice Questions

1) Which of the following statements is false?
A) Notice must be given for directors meetings
B) The solicitation of proxies is governed by the Securities and Exchange Commission
C) Shareholders may vote by proxy
D) Notice must be given for shareholder meetings
E) Directors may vote by proxy

3) The Hart-Scott-Rodino Antitrust Improvement Act led to rules requiring:
A) that certain activities are classified as per se violations
B) that mergers be allowed if United States competitiveness in world markets is improved
C) that violators of antitrust laws be liable for treble damages
D) that failing companies be rescued through mergers whenever possible
E) that the Federal Trade Commission and the Justice Department be notified in advance of any merger involving certain firms

4) Where a landowner seeks permission to build a structure that does not comply with the current zoning regulations applicable to the land in question, the landowner would seek an:
A) Variance
B) Nuisance permit
C) Covenant exemption
D) Nonconforming use permit
E) Taking compensation

5) Which of the following is not one of the parties to a standard life insurance contract?
A) Insured
B) Insurance broker
C) Beneficiary
D) Insurance company
E) Owner

6) Which of the following must occur upon the conclusion of the winding-up process of a limited partnership?
A) A certificate of cancellation must be filed with the secretary of state in the state of organization.
B) To protect their limited liability, the limited partners must give notice of the termination of the partnership to those parties with whom the partnership has dealt.
C) The general partners must post a bond to cover potential claims against the partnership.
D) The limited partners must receive their capital investment before the general partners receive theirs.

7) The board of directors of Sunny Corporations votes 9-2 to require all future actions by the shareholders to be approved by a two-thirds majority. This action is:
A) valid, and would have been valid also with a vote of 6-5
B) valid, as long as the two dissenting directors properly registered their dissent
C) invalid because the board of directors does not have the power to decide this
D) valid, but would not have been valid if the vote had been 6-5
E) invalid because supramajority requirements are not permissible

8) Lynda is a member of a manager-managed LLC but is not a manager. However, Lynda has considerable expertise in the business of the LLC . Lynda assisted the managers for the first couple of years of the LLCs existence without any difficulties. During the third year, Lynda began to challenge some of the decisions made by the managers who had begun to shut Lynda out of most decisions. Lynda demands that as a member of the LLC she be allowed to participate in its management and that she be compensated for the services she is providing. In the case:
A) Lynda will be allowed to participate, but is not entitled to any compensation
B) Lynda cannot demand a continued management role, but is entitled to compensation for the services already delivered
C) Lynda is not entitled to participate in management, nor is she entitled to compensation
D) Lynda will be allowed to participate in management and is entitled to compensation

10) Which of the following statutes places an affirmative duty on employers to bargain in good faith with unions?
A) The Norris-LaGuardia Act
B) The National Labor Relations Act
C) The Labor-Management Relations Act
D) The Worker Adjustment and Retraining Notification Act
E) The Labor-Management Reporting and Disclosure Act

11) Which of the following is true about the contract exception to the employment atwill doctrine?
A) It applies only if the employee who is wrongfully terminated is unable to find alternative employment
B) The exception applies only where an attempted termination by the employer would be a violation of a statute
C) The exception can apply based on the conduct of the parties or statements made by the employer or its agent
D) In order to apply, there must be an express written contract specifying the terms of employment
E) In order to apply, there must be an express written contract specifying the terms of employment and the contract must state that the employee is not an at-will employee

12) When is an agent liable for a tort committed by the principal?
A) When the tort was committed with the scope of the agency
B) When the agent ratifies the action
C) When the agency is undisclosed
D) When the agent has aided or abetted the principals tortuous conduct
E) Both A and D

13) Robert was the president of JKL, Inc. JKL intended to purchase Target Co. JKLs intent was not public information, and when it became public. Targets stock would increase significantly in value. Robert individually bought 1,000 shares of Target Co. Ten months later, when the merger was publicly announced, Robert sold Targets stock and made a large profit. Assuming that Robert is guilty of a violation under the 1934 Securities and Exchange Act, what are the possible consequences?
A) The government could charge Robert with criminal violations, leading to fines and/or imprisonment
B) The persons who sold Robert the stock could sue Robert for damages
C) The persons who sold Robert the stock could rescind the sale and recover their stock
D) A, B, and C
E) B and C only

14) Nicole is president of the Blue Valley Credit Card Company. Nicole is concerned with the liability of the company for any use of the Blue Valley cards it has issued. Which of the following statements regarding credit cards is false?
A) If a credit card is stolen, and the cardholder notifies the company of the theft before any unauthorized charges are made, the holder is not liable for any unauthorized charges.
B) A credit cardholder is liable only for up to $50 of unauthorized charges if his card is stolen.
C) A customer must apply for a credit card before Blue Valley may issue a card.
D) If a purchaser buys a faulty product with a credit card, the purchaser may withhold payment to the credit card company until the dispute is settled.

15) Which of the following is true in a typical franchise situation?
A) A franchisee can be found liable for misappropriating trade secrets even if the item has no patent or trademark protection
B) Trade secrets are generally protected under federal law
C) A franchisee granted a license to use a trademark cannot be found guilty of trademark infringement
D) Trademarks and service marks are sold to the franchisee

16) In an agency for a fixed term, such as 1 year, prior to the end of the stated period, the agent has:
A) the right, but not the power, to terminate the arrangement
B) the power, but not the right, to terminate the arrangement
C) both the power and the right to terminate the arrangement
D) neither the power nor the right to terminate the arrangement

17) Recording statutes for real property:
A) guarantee that buildings meet certain minimum standards as far as condition goes
B) allow potential buyers to check whether there are any liens or mortgages on a piece of property
C) eliminate the need to acquire title insurance because the chain of title can be traced
D) are optional in most parts of the country

18) Which of the following is not required of a states compliance plan for a nonattainment area?
A) Provision of adequate state funding for the installation of pollution control equipment
B) Required installation of pollution control equipment on major sources
C) Implementation of an inspection system for mobile sources
D) Identification of major sources of air pollution

19) Which of the following is true about general principles of law as a source of international law?
A) The general principles in a given dispute can include legal principles from any nation with a developed legal system
B) The general principles must come from constitutions or statutes
C) The general principles refer to principles that both common law legal systems and principles can be used as a basis to settle the dispute
D) The general principles must be part of the law of each nation that is party to the dispute

20)Aaron, after a long and distinguished career at a nuclear weapon plant in the plutonium storage department , is hired by a local company to work in its warehouse. Aaron skin has turned bright green form the years around the plutonium, but he is otherwise healthy and is not , himself, radioactive in any way. All scientific and health experts have determine that this condition is permanent, but harmless. After working in the warehouse , Aaron is not promoted, and Aaron believe its his green skin. Which of the following, if it is true and is the reason Aaron is not promoted, would give Aaron the best chance of prevailing if Aaron sues his employer because he was not promoted.
A) A) Supervisor need to understand the computerized inventory system and Aaron did not, despite his attempt to understand it.
B) A black worker was promoted because the black worker has worked longer for the employer, and promotion were made on the basis of seniority.
C) Aaron has told his boss he was gay and this was the reason he did not get promoted
D) A white worker was promoted because the white worker was simply a better warehouseman
E) Despite the opinion of expert, some of the people that Aaron would be supervising thought he had some kind of disability and therefore did not want to work for him.

21) Edward's warehouse stores a variety of generic goods for several distributor in Anytown. Which of the following describes Edward's liability for bail good should something happen to them.
A) Strict Liability
B) Comparative liability
C) Ordinary negligence
D) Ordinary negligence